Announcing $125M Fund III!

Today we’re excited to publicly announce the launch of Angular Ventures III, a $125M inception-stage fund dedicated to determined technical founders across Europe and Israel solving today’s most complex problems.

• Hard tech for hard markets. We love partnering with technical founders tackling tough markets. In the last twelve months alone, we’ve backed founders leveraging technical breakthroughs to take on some of the world’s hardest-to-crack markets: international ocean shipping, small-scale manufacturing, modern power grid optimization, the complete re-invention of the Kubernetes stack, electromagnetic space launch systems, next-generation sequencing, nuclear power, among others.

• An equal partnership designed to take risk. Any time a founder meets either of us, they get a person empowered to run a full process and make a final investment decision. We do all our own work, and, with zero internal politics or conflicting agendas, we focus on exactly what we promised our limited partners we’d do: leading rounds to back the most ambitious founders we can find.

• Building a firm for company building. We’re constructing a firm focused on one thing: helping founders build companies that can compete globally from day one. Our advisory partner network continues to grow, with a keen focus on advisors with experience scaling in the US. This week, we are hosting our first-ever founder summit - a GTM-focused “sales kickoff” style event - in New York City.

• Expanding the team. We are also incredibly excited to announce that Hazel Mulhare has joined Angular to focus on building our network globally. More on that below.

You can read more about the fundraise and exactly how we’re doubling down on inception-stage investing in our full post here.

As we write in the post announcing the fund (which you can read here), we are living through dramatic changes in both venture financing and technology itself. After years of painstaking incremental progress, a tidal wave of innovation driven by AI and advanced computing is crashing over all of us. At the same time, advances in energy, biology, space technologies, and other frontier technologies are colliding against unprecedented societal needs and climate emergencies. We are all standing in awe at the size of the waves crashing over the technology world. But in the midst of that tumult, we are keenly aware that our role is to partner with the small bands of sailors, pirates, and explorers who are committed to navigating a course into the future.

Let’s do this.

Gil, David, Hazel and Anne

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ENTERPRISE/TECH NEWS

A turning point in AI development. It’s been a tumultuous week in tech following the news of DeepSeek having built an OpenAI-level LLM at a fraction of the cost. “DeepSeek shows that generative AI still has a lot of juice, despite the chatter about “scaling walls” and worries about spending and margins. Models are still improving. A bounty of agents and applications are in the pipeline. Benchmark’s Eric Vishria called foundation models “the fastest depreciating asset in history,” and DeepSeek does put a finger on the question of how defensible a better proprietary LLM is on its own.” In fact, within a week of DeepSeek’s R1 launch - a model that cost less than $6M - Berkeley researchers were able to replicate the DeepSeek model for just $30. “This research carries echoes of the Transformer revolution, democratizing access to cutting-edge AI technology. With the entire project costing less than $30 and all code available on GitHub, it opens doors for researchers worldwide to contribute to AI advancement. Richard Sutton, the father of reinforcement learning, would likely find vindication in these results. They align with his vision of continuous learning as the key to AI advancement, demonstrating that sophisticated AI capabilities can emerge from relatively simple systems given the right learning framework. This work from a Chinese AI research company may well mark a turning point in AI development, proving that groundbreaking advances don't require massive resources – just clever thinking and the right approach.”

What about OpenAI? The same week DeepSeek’s R1 model was released, the Wall Street Journal reported that OpenAI was raising $40B led by Softbank at up to a $300B valuation – almost double its current valuation. “The news was perfectly timed to blunt the doomsday predictions about the big American LLM companies. Whether the deal closes at that price will be a litmus test of its own.” Additionally, OpenAI and Microsoft’s partnership has shown signs of fraying for a while, in part due to OpenAI’s massive capital requirements for work which is now likely being distilled by other AI companies like DeepSeek. "Indeed, this is probably the core economic factor undergirding the slow divorce of Microsoft and OpenAI. Microsoft is interested in providing inference to its customers, but much less enthused about funding $100 billion data centers to train leading edge models that are likely to be commoditized long before that $100 billion is depreciated."

HOW TO STARTUP

How VCs decide to take a first meeting. The Venture Curator recently covered an ever-important topic for founders: how VCs decide to take a first meeting. Most pitch decks sent to VCs don’t lead to a meeting, so how can founders improve their odds of getting an initial VC meeting? VCs prioritize meeting with startups that demonstrate a strong founding team, a compelling market opportunity, and a scalable business model. Additionally, warm intros and referrals are gold. “A strong referral from someone the investor trusts can make a huge difference. If you have a solid connection, make sure to highlight it. If the intro came through a less direct route, that's okay too - just be upfront about it. VCs appreciate knowing the context of how you got to them.”

YC’s latest request for startups. YC released its latest request for startups they are looking to back in 2025, noting that “from the AI breakthroughs of the last few months, a wave of new startup opportunities have been unlocked”. As Greg Isenberg points out “it's mostly AI that replaces $100k/year job functions.”

HOW TO VENTURE

The VC fund trap. James Heath, an LP in VC funds, wrote a brilliant piece on the VC funding trap in store in the next five years. James highlights how the VCs that are neither small and nimble or elite name brands are likely to fall into the funding trap, where they are unable to optimize for ownership nor entry price. “Unlike small funds, mid-to-larger funds will struggle to optimise ownership due to their size. These firms cannot rely on smaller exits to generate meaningful returns and must aim higher, but without access to top-tier assets, they are stuck in a no-man’s-land. Without the elite's ability, they are locked out of the best deals. It limits upside potential and further exacerbates the clearer picture of a portfolio of subpar or overpaid assets. Many of these funds risk becoming 'zombie funds' - vehicles that fail to raise new capital or deliver returns and become stuck in limbo. We are about to see a new wave of such funds, neither successful enough to compete with the elite nor small enough to possess the associated quantitative and qualitative advantages.“

The DeepSeek reset. Axios reports that China’s DeepSeek may be “an extinction-level event for venture capital firms that went all-in on foundational model companies. Particularly if those companies haven't yet productized with wide distribution.”

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